The Uniform System of Accounts

April 27, 2018 | Author: Anonymous | Category: Business, Accounting
Share Embed Donate


Short Description

Download The Uniform System of Accounts...

Description

The Uniform System of Accounts For Restaurants A Trade Secrets Special Report From Bill Main

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

The Uniform System Of Accounts For Restaurants For today's independent or chain restaurant, profitability rarely occurs by accident. Rather, making money in this most difficult of businesses is the result of a singular dedication to organization at every level of the restaurant. This is never easy, as restaurants are by definition complicated and irrational creatures requiring constant attention to detail. Further, managers must be prepared to solve problems by improvising on a moment's notice. That is the essence of serving the public in such a dynamic and fast paced environment as a restaurant, whose natural order is often disorder. O'Toole's corollary to Murphy's Law says it best: "Murphy was an optimist!" As a result, maintaining a reasonable level of organization in a restaurant requires a religious, almost fanatical commitment to the consistent execution of fundamental business principles. Such devotion must start with the recognition that "the numbers" are the ultimate measure of profitability, and as such must be organized and presented in a manner that allows for objective and detailed analysis and review. To be profitable, an owner or manager simply must have a reasonable grasp of the numbers and their implications for informed decision making. I call this phenomenon the "profitability mindset." First things first, however. Let's be clear that in any successful restaurant, the first two priorities are always the customer and the employee, in that order. If their needs are being met, profits are likely to follow. But profits also depend on maintaining an organizational climate conducive to profitability. The first step in this process always lies in the establishment of a sensible financial reporting format. Today's restaurateurs must be able to monitor the ebb and flow of revenue and expense as presented in their statement of profit and loss. They must be able to see where they stand in terms of controlling food, beverage and labor costs as well as other expenses attendant to the effective day-to-day operation of the restaurant.

A Pro Active Step To this end, I recommend adoption of the Uniform System of Accounts for Restaurants. It was first developed in 1930 by the National Restaurant Association in conjunction with Laventhol and Horwath, an international accounting firm specializing in the hospitality industry. At that time, it was recognized that there would be rapid growth in the restaurant industry through the development of new food products, improvements in supplies and equipment, as well as new methods of purchasing and packaging. The market was changing, too. Super highways, airports and suburban shopping areas suggested significant changes in spending patterns. Lastly, the growth of government regulatory policy in the areas of tax regulation and wage and hour laws suggested a need for a standardized financial reporting system sensitive to the

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

impact these various advances would have on operating characteristics and the presentation of operating results. It was also recognized that, to be universally accepted, such a system would require periodic review and modification so as to be responsive to the needs of an evolving industry.

A Financial Reporting Blueprint The Uniform system of Accounts for Restaurants is akin to a reference textbook on the subject of restaurant accounting. It provides a common financial language to the industry, allowing restaurants large and small to more precisely interpret their operating results and financial position. It provides a comprehensive set of guidelines for financial reporting formats, offering a standardized, restaurantspecific chart of accounts with detailed instructions as to the proper classification of revenue, expense, asset, liability and equity items associated with the preparation of financial statements. Of specific interest, of course, is the Statement of Income and Expenses. Additionally, the structure of the Uniform System conforms readily to accounting disciplines set forth by generally accepted accounting principles (GAAP). It also contains a section on record keeping systems for a small restaurant as well as a helpful synopsis on food and beverage cost controls.

Easy To Use From an operator's perspective, the Uniform System is easy to use. No longer must you rely on your accountant to explain the underlying rationale behind the presentation format of your financial statements. Classification of each monetary expense is simple. Based on the guidelines set forth in the Uniform System, each different operating cost is assigned to a specific expense account (e.g., linen rental, contract cleaning, china, etc.), which is part of a specific expense class or group (e.g., Employee Benefits or Direct Operating Expenses). It is a beautifully logical system, allowing each individual itemized cost to easily flow into its designated expense account and then be summarized in its appropriate expense group.

Comparison To Industry Averages Typically, published restaurant industry averages follow the Uniform System. They are compiled using historical data contributed from restaurants representing a broad cross section of concepts, locations and volume ranges. Therefore, once the Uniform System is in place in an operation, restaurant owners and managers have the ability to compare their profit performance and cost ratios to industry standards on an "apples versus apples" basis. The best source of industry averages is the National Restaurant Association's "Restaurant Industry

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

Operations Report" published bi-annually in conjunction with Deloitte & Touche, Restaurant/Entertainment Advisors.

Best Seller Not surprisingly, the Uniform System of Accounts for Restaurants is historically a top-selling publication in the National Restaurant Association's library. This continuing demand is evidence of the restaurant industry's need and acceptance of a publication that has had such a significant impact on the organizational climate of foodservice establishments across the country. The publications can be purchased from the National Restaurant Association’s on-line store (www.restaurant.org/store). Adoption of the Uniform System of Accounts for Restaurants is a vitally important first step towards developing the "profitability mindset," and is recommended for all serious practitioners in the restaurant industry.

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

SAMPLE CHART OF ACCOUNTS

BALANCE SHEET ACCOUNTS ASSETS 1010 1015 1020 1110 1115 1120 1210 1250 1310 1320 1330 1410

Current Assets Cash on Hand Cash in Bank - General Checking Cash in Bank - High-Yield Checking Accounts Receivable - Trade Accounts Receivable - Owner/Employee Accounts Receivable - Credit Cards Food Inventory Beverage Inventory Prepaid Taxes Prepaid Insurance Prepaid Miscellaneous Expenses Note Receivable - Current Portion

1510 1511 1610 1611 1660 1670

Fixed Assets Leasehold Improvements Accumulated Amortization - L/H Imp Furniture, Fixtures & Equipment Accumulated Depreciation - FF&E China, Glass, Flatware Par Small Equipment Par

1910 1920 1930 1940 1950

Other Assets Deposits Paid Liquor License Organizational Expenses Logo/Artwork Note Receivable - Long Term Portion

© Bill Main & Associates

LIABILITIES & EQUITY 2010 2020 2030 2040 2110 2115 2120 2130 2135 2140 2145 2210 2215

Current Liabilities Accounts Payable - Trade Accounts Payable - Other Gift Certificates Outstanding Deposits Held Sales Tax Payable Payroll Taxes Payable Other Taxes Payable Accrued Insurance Accrued Payroll Accrued Rent Accrued Miscellaneous Expenses Note/Loan Payable - Current Portion Note/Loan Payable - Current Portion

2310 2315

Long Term Liabilities Note/Loan Payable - Long Term Portion Note/Loan Payable - Long Term Portion

2410 2420

Other Liabilities Other Notes Shareholder Notes

3100 3899 3900

Shareholders' Equity Capital Stock Retained Earnings - Prior Years Current Profit/Loss(-)

More Great Trade Secrets & Tools At www.monkeydish.com

INCOME & EXPENSE ACCOUNTS 4010 4020 4030

Revenue Food Sales Liquor/Beer /Misc. Bar Sales Wine Sales

5010 5020 5030

Cost of Sales Food Cost Liquor/Beer /Misc. Bar Cost Wine Cost

5110 5120 5130 5140 5150 5155

Salaries & Wages Administrative Wages Bar Wages Kitchen Wages Restaurant Wages Bonuses & Incentives Vacation Pay

5165 5170 5175 5180 5185

Employee Benefits Employer Payroll Tax Expense Workers' Compensation Insurance Medical & Dental Insurance Employee Meals (cost) Miscellaneous Employee Benefits

5210 5215 5220 5225 5230 5235 5240 5245 5250 5255 5260 5265 5270

Direct Operating Expenses Auto/Gas Expense - Operations China/Glass/Flatware Replacement Contract Cleaning/Janitorial Service Decorations Laundry/Linen Licenses/Permits Menus and Wine Lists Supplies - Banquet/Catering Supplies - Bar Supplies - Cleaning/Janitorial Supplies - Kitchen Supplies - Restaurant Uniforms

5300

Music & Entertainment (see detail list)

5320 5325 5330 5335 5340 5345 5350 5355 5360 5365

Marketing Complimentary Food & Beverage (cost) Donations/Charities Media Advertising Other Promotional Expenses Postage/Delivery (promo) Photo/Printing/Graphics Programs & Directories Restaurant Research & Development Signature Souvenirs Telephone (promo)

5410 5420 5430 5440

Utility Services Electricity Natural Gas/Fuel Scavenger/Waste Removal Water & Sewage

© Bill Main & Associates

5510 5520 5530 5540 5550

Occupancy Costs Rent/Lease (Premises) Equipment Lease Property Taxes Insurance - Property Other Taxes

5610 5620 5630 5640 5650

Repairs & Maintenance Grounds/Gardening Maintenance Contracts-Equipment Repairs & Maintenance-Equipment Repairs & Maintenance-Premises Miscellaneous Repairs & Maintenance

5710 5720

Depreciation & Amortization Depreciation Expense Amortization Expense

5810 5820 5830 5831 5840 5841 5850

Other (Income)/Expense Interest Income Room Rental Fees Gifts/Novelties Sales Gifts/Novelties Costs Telephone Coin Box Commissions Discounts Taken Miscellaneous Income

5910 5913 5916 5919 5922 5925 5928 5931 5934 5937 5940 5943 5946 5949 5952 5955 5958 5961 5964 5967 5970 5973 5976

Administrative & General Auto/Mileage Allowance Bad Debt Expense Bank Charges Cash Over/Short Computer Supplies Credit Card Discounts Dues and Subscriptions Educational Materials Entertainment (Business Operation) Forms/Paper Products/Printing (A&G) Insurance-Liability/Umbrella Insurance-Miscellaneous Legal/Accounting Professional Services Management Fees Miscellaneous Expenses Office Supplies Outside Services Personnel Expenses Postage/Delivery (A&G) Security/Alarm Seminars/Conventions Telephone/Communications Travel Expenses

6100 6300 6400

Interest & Non-Operating Exp. Interest Expense Officers' Salaries & Benefits Corporate Office Expenses

6900 6950

Income Taxes State Income Tax Federal Income Tax

More Great Trade Secrets & Tools At www.monkeydish.com

ACCOUNTS DETAIL DIRECT OPERATING EXPENSES Auto/Gas Expense - Operations gas, oil, repairs & maintenance for vehicles used for deliveries and operations' errands mileage reimbursements (operations) China/Glass/Flatware Replacement China serving and table ware Glassware for both bar and dining room [Table Linen and Napkins, if purchased] Contract Cleaning/Janitorial Service Decorations Decorative pillows, etc. Flowers for tables (fresh and artificial) Holiday decorations Wall hangings, pictures, etc Equipment Rental - Operations Credit Card Authorization Terminals Credit Card Imprinters Equipment/Supplies Rental (short-term) Laundry/Linen Laundering costs of: kitchen aprons/hats/shirts table linens, napkins towels Rental costs of the above Licenses/Permits Liquor license renewal fee Health inspection fee, Scale inspection fee Outdoor advertising permit Menus and Wine Lists Design/printing costs of: drink lists, table tents menus, wine lists Menu Covers Supplies-Banquet/Catering Any supply/decoration/expense used or incurred solely for banquets/catering

Supplies-Cleaning/Janitorial Bleach, cleanser, degreaser Brooms/Mops Dishwashing Supplies Paper Towels Rubber Gloves Sponges/Scouring Pads Toilet Paper, Toilet Seat Covers Trash Can Liners Supplies-Kitchen Can Openers Coffee Filters Cooking Utensils, such as: fry baskets ladles/skimmers mixing bowls, mixing/serving spoons pans/pots Foil Wrap Grill Screens Knives/Cleavers, Sharpening Steel Oven Mitts Plastic Aprons Plastic Bags, Plastic Wrap Portion Cups Waxed Paper Supplies-Restaurant Birthday Candles Cork Trays Doilies Guest Checks Light Bulbs (decorative) Matches Take-Out Containers Uniforms Aprons/Smocks Badges Blouses/Shirts Caps/Hats/Hairnets Dresses/Suits/Trousers Shoes Ties Uniform cleaning/repairs

Supplies-Bar Ashtrays CO2 (soft drink dispenser) Corkscrews/Bottle Openers Gratis snacks (nuts/pop corn/etc.) Paper/Beverage Napkins Shakers Strainers/Fruit Squeezers Straws/Swizzle Sticks/Toothpicks Venetian Blue Candles

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

MUSIC & ENTERTAINMENT Orchestras and Musicians Professional Entertainers Mechanical Music Muzak or Other Wire Services Piano Rental and Tuning Films, Records, Sheet Music Programs Royalties (e.g., to ASCAP) Booking Agent's Fees Meals Served (cost) to Entertainers

UTILITY SERVICES Electricity Natural Gas/Fuel Scavenger/Waste Removal Water & Sewage The Uniform System of Accounts for Restaurants (USAR) states that kitchen usage of Electricity and Natural Gas/Fuel should be metered separately and charged to Direct Operating Expenses as "Kitchen Fuel". If separate meters do not exist, ALL electricity/natural gas/fuel costs should be expensed here. Normally, Electric Bulbs are expensed here. The replacement bulbs in this sample are decorative; therefore, they are charged to Restaurant Supplies.

MARKETING Complimentary Food & Beverage Cost of gratis meals to customers Cost of gratis alcoholic beverages to customers, plus sales tax (if applicable) Donations/Charities Cash donations to: Charities/Community Groups Financial Sponsorship of activities such as Little League Media Advertising Newspapers/Magazines Radio Television Other Promotional Expenses Civic and Community Projects/Involvement: Chamber of Commerce membership Meetings of committees, etc Entertaining Costs in Promotion of Business Travel Expense on Solicitation Other Misc. Promotional Expenses Postage/Delivery (Promo) Bulk Mailing Postage Meter usage Promo Mailing Supplies, such as labels Photo/Printing/Graphics Customer Survey Forms Customer Post Cards Customer Mailers/Direct Mail Ads

REPAIRS & MAINTENANCE Grounds/Gardening Maintenance Contracts - Equipment Comupter Hardware and Software Typewriters, Copy Machines Time Clock, Point-of-Sale Repairs & Maintenance - Equipment Dining Room Furniture; Upholstering Dishwashing & Sanitation Equipment Kitchen, Bar, Office Equipment Refrigeration Equipment

Programs & Directories Travel/Dining Guide Listings Yellow Page Ad in phone directory Restaurant Research & Development "Sampling" at Other Restaurants: Local Competition Research Menu/Decor/Operation Ideas Signature Souvenirs Gratis souvenirs given to customers Telephone (Promo)

Repairs & Maintenance - Premises Air Conditioning, Plumbing, Heating, Electrical Elevators and Lifts Floors and Floor Coverings Parking Lot Repairs Buildings; Building Alterations not capitalized Miscellaneous Repairs & Maintenance Storage Containers Pest Control Small repair tools/supplies not capitalized

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

GENERAL & ADMINISTRATIVE Auto/Mileage Allowance Auto allowances paid to authorized management personnel as part of compensation package Mileage reimbursements for use of employee vehicles for administrative-related errands Bad Debt Expense Customer and Trade "Uncollectibles": Checks Credit Card Charges Receivables Customer Walk-Outs Bank Charges Account Service Charges/"Analyses" NSF Fees/Returned Item Charges Stop Payment Charges [Credit Card Imprinters/Authorization Terminals are charged to Dir. Op. Exp.] Cash Over/Short Petty Cash/Change Bank overages/shortages Bartender/Waitron overages/shortages (incl. the reimbursement/paid-out of same) Computer Supplies Computer paper, ribbons, blank disks, etc. Program software "update" costs Misc. software/hardware purchases which are not capitalized Credit Card Discounts Dues and Subscriptions CRA and/or NRA Membership fees Other trade/business organization dues/fees Trade Papers/Magazines Subscriptions

Insurance-Liability/Umbrella Liquor Liability coverage General Liability coverage Umbrella (Excess Liability) coverage Insurance-Miscellaneous Officers' Life Insurance Miscellaneous Insurance Legal/Accounting Professional Services Legal Fees Accounting Service Fees (e.g., CPA) Miscellaneous

Expenses

Office Supplies Pens/Pencils Calculator/Cash Register Tape, Ribbon, etc. Scotch Tape/Staples/Paper Clips Typewriter Supplies White Out, Post Its, Memo Pads File Folders, Labels, etc. Small Equipment not capitalized Outside Services ADP Unemployment Insurance Cost control Consultant Fees Payroll Service costs Personnel Expenses Help wanted advertising Personnel agency fees All other recruitment costs Postage/Delivery (A&G only) Postage Meter refill, stamps Federal Express, Express Mail, U.P.S.

Educational Materials Cookbooks (used for reference only) Dictionary, Thesaurus, etc. Instruction Books/Pamphlets (e.g., for computer programs, or accounting procedures, etc.)

Rent-Other Postage Meter rental Typewriter rental (short-term)

Entertainment (Business Operation) Administrative Staff luncheons Managers Dinner Meals/Entertainment: Purveyors, Business Contacts, Executive "meetings", etc.

Seminars/Conventions Fees (Entrance and Attendance)

Forms/Paper Products/Printing (A&G) Check Printing Photocopy Supplies-paper, toner, dispersant Printing costs-handbooks, manuals, forms for both operations and accounting Stationery Supplies-envelopes/letterhead/etc. Facsimile supplies

© Bill Main & Associates

Security/Alarm

Telephone/Communications All telephone, facsimile, modem costs, except those expensed to "Marketing" Travel Expenses Business travel expenses, with the exception of travel expenses on solicitation (which are expensed to "Marketing"): Mileage Meals & Lodgings Bridge Tolls, Car Fare, Parking

More Great Trade Secrets & Tools At www.monkeydish.com

BALANCE SHEET FORMAT

ASSETS

LIABILITIES & EQUITY

Current Assets Cash on Hand Cash in Bank - General Checking Cash in Bank - High-Yield Checking Accounts Receivable - Trade Accounts Receivable - Owner/Employee Accounts Receivable - Credit Cards Food Inventory Beverage Inventory Prepaid Taxes Prepaid Insurance Prepaid Miscellaneous Expenses Note Receivable - Current Portion Total Current Assets

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

Fixed Assets Leasehold Improvements Accumulated Amortization - L/H Imp. Furniture Fixtures & Equipment Accumulated Depreciation - FF&E China, Glass, Flatware Par Small Equipment Par Total Fixed Assets

XXX XXX XXX XXX XXX XXX XXX

Other Assets Deposits Paid Liquor License Organizational Expenses Logo/Artwork Note Receivable - Long Term Portion Total Other Assets

XXX XXX XXX XXX XXX XXX

Total Assets

XXX

© Bill Main & Associates

Current Liabilities Accounts Payable - Trade Accounts Payable - Other Gift Certificates Outstanding Deposits Held Sales Tax Payable Payroll Taxes Payable Accrued Insurance Accrued Payroll Accrued Rent Accrued Miscellaneous Expenses Note/Loan Payable - Current Portion Note/Loan Payable - Current Portion Total Current Liabilities

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

Long Term Liabilities Note/Loan Payable - Long Term Portion Note/Loan Payable - Long Term Portion Total Long Term Liabilities

XXX XXX XXX

Other Notes/Loans Payable

XXX

Total Liabilities

XXX

Shareholders' Equity Capital Stock Retained Earnings - Prior Years Current Profit / Loss (-) Total Shareholders' Equity

XXX XXX XXX XXX

Total Liabilities and Shareholders' Equity

XXX

More Great Trade Secrets & Tools At www.monkeydish.com

SUMMARY INCOME STATEMENT FORMAT

Current Period

% of Sales

Year-ToDate

% of Sales

Revenue Food Sales Beverage Sales Total Revenue

XXX XXX XXX

XX XX XX

XXX XXX XXX

XX XX XX

Cost of Sales Food Cost Beverage Cost Total Cost of Sales

XXX XXX XXX

XX XX XX

XXX XXX XXX

XX XX XX

Gross Profit

XXX

XX

XXX

XX

Operating Expenses Salaries & Wages Employee Benefits Direct Operating Expenses Music & Entertainment Marketing Utility Services Occupancy Costs Repairs & Maintenance Depreciation & Amortization Other (Income)/Expense General & Administrative Total Operating Expenses

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

XX XX XX XX XX XX XX XX XX XX XX XX

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

XX XX XX XX XX XX XX XX XX XX XX XX

Income Before Interest & Non-Operating Expenses

XXX

XX

XXX

XX

Interest & Non-Operating Expenses Interest Expense Other Expenses Total Interest & Non-Op Expenses

XXX XXX XXX

XX XX XX

XXX XXX XXX

XX XX XX

Income Before Income Taxes

XXX

XX

XXX

XX

Income Taxes

XXX

XX

XXX

XX

Net Profit or (Loss)

XXX

XX

XXX

XX

© Bill Main & Associates

More Great Trade Secrets & Tools At www.monkeydish.com

View more...

Comments

Copyright � 2017 NANOPDF Inc.
SUPPORT NANOPDF